We have been studying the mechanism by which initiation of transcription is regulated by activators and repressors, by using the galactase operon in Escherichia coli as a model system. The gal operon is transcribed by two tanden promoters, P 1 and P 2, which are regulated in a variety of ways by a number of regulatory proteins, which act by binding to their corresponding sites on the gal DNA. We report two critical finding below. (1) Transcription from P 1 is activated by cAMP and its receptor protein (CRP) complex which when bound to DNA enhances gal transcription. We have set up an assay using the fluorophore, 2,aminopurine to directly analyze the isomerization step of initiation. We have been able to show that isomerization can be further subdivided into three steps, one of which is rate limiting. We have also shown that cAMP-CPR stimulate P 1 transcription by enhancing the rate limiting step of isomerization. (2) Both promoters of the gal operon are repressed by the formation of a DNA loop. Loop formation requires the interaction of two GalR regulators, when bound to two operators, which span the promoters, in the presence of the histone-like protein HU. HU binds to a site between the two operators. By structure-based genetic analysis, we have defined the GalR interfaces for interaction. The interaction generates a V-shaped structure of stacked GalR. We are currently studying the role of HU in DNA-looping by isolating and characterizing HU mutants which are defective in DNA looping by GalR but bind to DNA.